posted at 2:30 pm on July 20, 2011 by Tina Korbe

A new report out yesterday from The Heritage Foundation shows private sector job creation dropped dramatically almost immediately after President Barack Obama signed the Patient Protection and Affordable Care Act (a.k.a. Obamacare) into law.

From the recession’s low point in January 2009 until April 2010, when Obamacare went into effect, the private sector created about 67,600 jobs a month. After the president signed PPACA into law, that number slowed to a meager 6,400 jobs a month — a more than 90 percent decrease or less than one-tenth the previous rate.

As the report states, correlation cannot prove causation — but the change in course is statistically measurable and testing reveals a structural break between April and May of 2010. Moreover, small-business owners have said Obamacare is a deterrent to hiring. Take Scott Womack, the owner of 12 IHOP restaurants in Indiana and Ohio, as just one example. Before Obamacare became law, he had development plans in Ohio. Now, he’s worried he won’t be able to carry out his original plans unless Obamacare is repealed. Those restaurants he planned to open would provide jobs not only for his future employees, but also for everyone involved in the construction of the restaurant buildings themselves.

As the Heritage report explains, Obamacare discourages hiring in three important ways:

Businesses with fewer than 50 workers have a strong incentive to maintain this size, which allows them to avoid the mandate to provide government-approved health coverage or face a penalty;

Businesses with more than 50 workers will see their costs for health coverage rise—they must purchase more expensive government-approved insurance or pay a penalty; and

Employers face considerable uncertainty about what constitutes qualifying health coverage and what it will cost. They also do not know what the health care market or their health care costs will look like in four years. This makes planning for the future difficult.

Democrats once touted that Obamacare would create jobs, but the data underscore the reality that that’s not true for the private sector. The only jobs Obamacare created were within the new agencies and layers of bureaucracy the law added to the federal government.

The Heritage report recommends repeal — and comes as a welcome reminder that the health care law can’t be ignored as the president and Congress attempt to address the debt and deficit or as the nation attempts to right the still-struggling economy. Nor can it be ignored in the upcoming presidential election. Likely U.S. voters have said jobs and the economy are their No. 1 issue. That means the repeal of Obamacare should be a top priority, too.

One of the first acts of the new House at the beginning of this year was to pass a repeal bill, but, of course, that bill was blocked in the Senate and definitely didn’t receive the president’s signature. Still, repeal is possible — but it will require the election of a president who will sign a repeal bill in 2012. That puts all the GOP presidential contenders in perspective. Even Mitt Romney, the architect of Obamneycare (Tim Pawlenty’s one pitch-perfect zing), has said he’d support repeal — and, whatever skeptics might say, he’s surely more likely to sign his name to repeal than Obama is. When the GOP does pick its candidate, voters concerned about Obamacare’s impact on jobs and the economy surely can get behind whoever the candidate is.

Otherwise, the country faces more of the same. Another Heritage report out recently showed jobs recovery will take far longer than most expect under any circumstances. According to that report, unemployment wouldn’t return to its natural rate of 5.2 percent until 2014 even if the economy immediately started adding jobs at the rate it did during the tech bubble, which was about 265,000 jobs a month. At a more realistic rate of 176,000 jobs a month, the unemployment rate wouldn’t drop to 5.2 percent until about 2018.

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“Let me be clear: according to this graph, we built a whole lotta ATMs in April 2010. Now, there are those who say Obamacare is the real job killer, but thos extremists, who aren’t willing to spread the wealth around, who cling to their guns and their religion and the money they earned, will not prevent us from forcing Americans in all 57 states to purchase gov’t-approved health insurance. Thank you.”

Take Scott Womack, the owner of 12 IHOP restaurants in Indiana and Ohio, as just one example. Before Obamacare became law, he had development plans in Ohio. Now, he’s worried he won’t be able to carry out his original plans unless Obamacare is repealed.

Who is this guy and is he real???? I carefully analyze Obama photographs and videos for attached strings around the head and appendages but Soros has either hidden them masterfully or somebody has edited them out.

“That graph and the entire Heritage Foundation and anyone that reads their reports must be racist, greedy, hate-filled, bigoted, and anti-woman. That’s my only defense of Obamacare because I got nothin’ else.”

Businesses with more than 50 workers will see their costs for health coverage rise—they must purchase more expensive government-approved insurance or pay a penalty; and

We cannot have it both ways.

Health care costs for employers will probably drop since it will be cheaper–for the business, not for society–to drop health insurance coverage and dump the employees into the government exchange. Cap’n Ed even said so.

It’s the uncertainty. Obamacare was 2,400 pages, and in 1,968 instances grants a regulatory power to Sebelius. Those regulatory powers are not written into Obamacare, they are being written now by Sebelius’ staff. They will take years more to be completed, and then years to be fully understood and debugged by healthcare organizations. In a sense, we still don’t have a clue “what is in the bill”.

The 2,400 pages of Obamacare will likely mean at the very least 10,000 pages of regulations, written by those people that are more likely to die than be fired for incompetence.

If you are an employer and you look at this disaster, all you can do is lie low until it blows over. If you have money to invest, other countries suddenly look more attractive.

I had dinner last night with a friend that owns a small business. Year over year his business is generating double digit sales growth, but he was only able to break even. The guy is politically agnostic, but I see he edging closer to conservative views every day. He has decided that he is in business to make money (just as he did in years past), not to break even. So, he looked into what was eating his revenues and it turns out that it was ever increasing employee expenses. Insurance costs and taxes were hurting the business.

Right now he insures his employees high deductible insurance and a medical savings plan. Since Obamacare has become law, he has determined future insurance costs will rise significantly, since his policy will be phased out. Doing the calculations, he decided to let go several employees and go to contractors. In the end he will get the same amount of work and save $7000 – $10,000 per month in reduced payroll, insurance and taxes.

This will happen all over the country. In my own business, I’ve determined that employees will be forced to pay more for their insurance or have reduced pay. Business is not welfare and if all we do is tread water then why keep the doors open?

Funny. The vast majority of us here predicted this, way back in the summer of 2009.

Vashta.Nerada on July 20, 2011 at 2:53 PM

I made a series of predictions on our local blog regarding a number of Obama policies after some lefty declared the recession over and happy days were here again in July 2009 (“Better Every Day!”).

As each debacle came and went (C4C, Stimulus, Reg Bill, Obamacare, etc.) I made my predictions… and followed with what happened.

Of course, it doesn’t take a degree in economics (or even in broadcast journalism) to understand basic economic common sense. I remember explaining C4C to my 12-year-old and how the market would respond… she understood it… apparently the Democrats can’t handle 7th grade civics.

Oh, and by the way, folks – this is a permanent reduction in rate of growth, unless and until this unconstitutional POS is off the books. There is no compromise, nor is there a ‘phase out period’ that is acceptable.

Oh, and by the way, folks – this is a permanent reduction in rate of growth, unless and until this unconstitutional POS is off the books. There is no compromise, nor is there a ‘phase out period’ that is acceptable.

Vashta.Nerada on July 20, 2011 at 3:01 PM

Furthermore, until January of 2013, there is only one bargaining chip that the GOP holds – the debt ceiling. If Boehner and Cantor had any brains, they would tie repeal to any budget/debt ceiling vote.

Democrats once touted that Obamacare would create jobs, but the data underscore the reality that that’s not true for the private sector. The only jobs Obamacare created were within the new agencies and layers of bureaucracy the law added to the federal government.

According to progressive dogma, only government jobs are “real” jobs. Therefore, ObamaCare is accomplishing exactly what they intended it to; increasing the number of government jobs, and thus the size of their primary voter base- the bureaucracy and public-sector unions.

This should not surprise anyone. It is simply a more blatant version of the way the Democrats have operated for the last century, at least. Far from being new idea, it’s simply the Tammany Hall technique extended to the entire country.

The separation between the progressive “ruling class” and the American people is nearly complete. Once the bureaucracy and unions become fully entrenched in power to back them up, it will be.

it is pointless to tell them that in the end, the bloated government will absorb too much of the economy while producing no actual wealth, and collapse it. Because (1) they do not believe it- their dogma simply rejects the possibility, and (2) they are convinced that government does create wealth, by “adding value” to every penny it takes before pumping it back in.

In their math, if the economy is X, and government takes one-fifth of X as taxes, somehow in the end it comes back as 2X, meaning the economy is now (X + 2X = 3X) three times as big. So, if they can take out a fourth instead of a fifth, they can turn that into not 2X, but 3X, and we end up with a 4X- four times as big. By their logic, the more of the economy government consumes, the richer we all get.

The above argument was made to me a few years ago by a progressive who was also a retired high school math teacher. I more recently heard it from a Democrat U.S. Senator on a local radio program.

It appears to me that they are now ready to try it in the real world. Somehow, I don’t think it’s going to work.

Many on this website might remember me preaching warnings back in 2009 and early 2010 about Republicans claiming that they could safely campaigning on the fact that the economy wouldn’t rebound. I preached these warnings because economies are largely cyclical and Obama hadn’t really done anything to destroy the growth opportunity that was likely to occur.

Well, after Obamacare passed, I ceased these warnings because this outcome was what I expected.

Congratulations, Obama. You succeeded in killing the economic growth that you could have benefited from politically if you had simply done nothing!

I suggest you start funding a mil1tia, because thats what its going to come to. Because WHEN (not if) the crash comes, the looters and moochers will be carting off everything in your business that isn’t nailed down, and burning the rest.

I suggest you start funding a mil1tia, because thats what its going to come to. Because WHEN (not if) the crash comes, the looters and moochers will be carting off everything in your business that isn’t nailed down, and burning the rest.

When she brought ObamunistCare to the floor vote she said and I remember it well, “Jobs! Jobs! Jobs!” and she shook her fist in the air.

Of course we all saw this train wreck coming a long way off, but socialists are mentally defective individuals who expect the other oncoming train to get out of the way and continue on, refusing to accept the imminent peril right before their eyes.

People like that need our help, but they should all be in a special care facility, unless we now refer to congress as one.

Don’t you remember the President dared Eric Cantor to call his bluff well, the house called his bluff.

Now lets see the President put his cards on the table, he’ll have to actually present a plan, you know, in writing, first, that means he won’t get to vote present any more, he’ll actually have show what part of the gigantic government he’s put on our backs, he’s willing to cut and then stand by those cuts instead of terrorizing old people and blaming everyone but himself for the mess we’re in.

In their math, if the economy is X, and government takes one-fifth of X as taxes, somehow in the end it comes back as 2X, meaning the economy is now (X + 2X = 3X) three times as big. So, if they can take out a fourth instead of a fifth, they can turn that into not 2X, but 3X, and we end up with a 4X- four times as big. By their logic, the more of the economy government consumes, the richer we all get.

Amazing. A simplified treatment of the reality is something like:

If the economy is X, and the government takes 20% in taxes (0.2X), infrastructure and beauracracy will eat 75% of that, returning only 0.05X to be added back to the 0.8X which remained after the taxation. So X becomes 0.085X in the most generous possible scenario.

In actuality, since economics is a fluid thing, the truth is more like this:

When the government takes 20% of X, while failing to produce a federal budget for greater than 2 years, and while threatening additional taxes and regulations, and damaging our reputation overseas, and making it impossible for anyone to know what foolishness comes next, business activity shrinks in order to prepare for the worst, making another 10~20% vanish in lost entrepreneurial opportunity. Since that includes staff reductions to keep current operations as lean as possible, more unemployment checks are written, consuming more of how the government intended to spend that 20%, further diminishing its potential (though minuscule) return into the economy. So X has been turned into 0.60X ~ 0.65X initially, and might get a 0.02X taste of return following governmental decimation of the tax “revenues”. Voila, the government has turned X into 0.67X at the most.

I heard a commercial on the radio this morning reminding me that no taxpayer money is used for the US Postal Service, every bit of their cost of operation comes from stamps/postage fees.

Looks like I was way ahead of Heritage. From my post back in October 2010: Anyone notice that the economy flatlined the minute after ObamaCare was signed into law? I opined back then: “I claim, based on the US Department of Labor data that ObamaCare is likely the causal factor for causing the stagnation that we have now. And just wait until the inflation kicks in from the overspending, borrowing and printing of money by this regime. It’ll make the stagflation of the Carter era seem like Utopia. Obama is focused only on his liberal agenda, not on jobs”

I blame the Founding Fathers. They started this whole Republic, freedom, liberty voting mash-up in the first place. If it weren’t for them, we’d all have jobs. Well, if you can call servitude at the whim of the King a job.